About 90% of China's billionaires are the children of high-ranking government officials, says the Wall Street Journal, by way of explaining a survey finding that 96% of the Chinese public said they feel resentful toward the rich. Pretty good explanation, I'd say, even discounting for the possibility that some of these "princelings" may be billionaires not because they used their government connections to help their business, but because of good genes, good parenting, or good schooling. It's yet another data point, in addition to how China treats its human rights lawyers, to make one question GE chief executive Jeffrey Immelt's characterization of the Chinese government as, like Ronald Reagan, "good," "great leaders" who are worthy of emulation. And another data point in my argument that Goldman Sachs went astray in getting too close to China. Warren Buffett has done some of this, too, with investments in Chinese battery-maker BYD and Darfur-linked Petrochina (which he exited at a $3.5 billion profit). Mr. Buffett takes free suits from a publicly traded Chinese apparel maker, and even Mr. Buffett's purchase of the Burlington Northern and Santa Fe Railroad has been interpreted as a bet on China because of the railroad's strong routes from Pacific ports such as Long Beach and Seattle. Somehow Mr. Buffett manages to maintain his down-home all-American image.
Crony Capitalism in China